In the context of business and location selection, a demand generator refers to a factor or entity that creates or generates a significant demand for goods or services in a particular area. It can be a specific institution, industry, event, or any other element that attracts people or businesses and drives consumer or client demand. The importance of a demand generator in location selection is rooted in the principle of supply and demand. Businesses aim to establish themselves in areas where there is a high potential for customer demand and revenue generation. By strategically locating near a demand generator, businesses can tap into an existing customer base, benefit from the traffic and visibility generated by the demand generator, and increase their chances of success.
Here are a few examples to illustrate the importance of a demand generator in location selection:
1. Proximity to a university or college: A restaurant or bookstore located near a university campus can benefit from the high student population and faculty, as they can potentially become regular customers.
2. Shopping malls or entertainment centers: Retail businesses often seek locations near shopping malls or entertainment centers, as these locations attract a large number of people looking for shopping, dining, and entertainment options.
3. Business parks or industrial areas: Companies may choose to locate near business parks or industrial areas to gain access to a network of potential clients, suppliers, or business partners already present in those areas.
4. Tourist attractions: Businesses in the hospitality industry, such as hotels or restaurants, may choose locations near popular tourist attractions to cater to the influx of tourists and capitalize on the demand generated by them.